Delta Galil Industries has reported higher sales and record gross margin for the third quarter of 2025, driven by continued growth in its direct-to-consumer activities and improved factory efficiency, despite ongoing tariff pressures in its key markets.

For the quarter ended 30 September 2025, sales increased by 3% to US$539.0 million, up from US$524.2 million in the same period last year. Sales for the first nine months of 2025 rose 4% to US$1,507.8 million, compared with US$1,446.4 million a year earlier.

Direct-to-consumer sales of the company’s own brands rose 19% in the third quarter and 15% over the first nine months of the year. The higher proportion of direct sales, alongside greater manufacturing efficiency and favourable exchange rates, helped push gross profit for the quarter up 7% to a record US$233.2 million, with gross margin reaching 43.3% compared with 41.6% in the third quarter of 2024. For the nine-month period, gross profit was US$637.1 million, with a gross margin of 42.3%.

EBIT excluding non-core items for the third quarter was US$51.2 million, slightly lower than the US$52.3 million reported a year earlier, reflecting higher selling, general and administrative expenses. These were mainly linked to the expansion of direct-to-consumer operations, integration costs following the acquisition of the Passionata brand, increased IT spend including SAP implementation, and negative exchange rate impacts. Reported EBIT for the quarter was US$49.6 million.

Net income excluding non-core items, net of tax, rose 2% in the quarter to US$32.8 million from US$32.0 million in 2024. Reported net income for the quarter was US$31.4 million, compared with US$32.0 million a year earlier. For the nine months, net income excluding non-core items was US$67.2 million, with reported net income at US$65.7 million.

Diluted earnings per share excluding non-core items for the third quarter were US$1.15, compared with US$1.16 in the prior-year period. Reported diluted earnings per share were US$1.10, versus US$1.16 last year. For the nine-month period, diluted earnings per share excluding non-core items were US$2.33, while reported diluted earnings per share were US$2.28.

EBITDA excluding IFRS 16 effects was US$59.6 million in the third quarter and US$139.2 million in the first nine months of 2025. Operating cash flow excluding IFRS 16 was US$25.2 million for the quarter and US$42.3 million for the nine months, reflecting increased working capital to support expected growth in the remainder of the year. Net debt to EBITDA (excluding IFRS 16) stood at 0.9x at 30 September 2025.

Equity reached US$880.7 million at the end of the quarter, compared with US$797.8 million a year earlier. The company’s board declared a dividend of US$8.0 million, or US$0.3065 per share, payable on 3 December 2025 to shareholders of record on 26 November 2025.

Delta Galil said that recent changes to United States customs rules, including the suspension of the de minimis exemption for low-value imports, together with previously announced tariffs, are now expected to reduce 2025 operating profit by around US$25 million, an increase of approximately US$3 million over earlier estimates. Nevertheless, the company reaffirmed its full-year 2025 guidance, which calls for sales in the range of US$2,110–2,135 million, EBIT of US$171–176 million, EBITDA of US$275–279 million, and net income of US$97–101 million, excluding non-core items.

Delta Galil is an international textile and fashion group active across ladies’ lingerie, men’s underwear, loungewear, activewear, sleepwear, shapewear, socks, denim and outerwear. The company serves major global brands and retailers and also owns brands including Delta, Schiesser, Eminence, Athena, Splendid, PJ Salvage and Seven for All Mankind. Its vertically integrated platform covers design, development, production and distribution, supporting fast response and flexibility across its core markets in the United States, Europe and Israel.

www.deltagalil.com